"Crony class" benefiting from minerals regime

Miningmx | Wed, 29 May 2013 11:40

[miningmx.com] – DEMOCRATIC Alliance MP, James Lorimer, ripped into mines minister Susan Shabangu's budget vote speech in the national assembly yesterday saying corruption would lead to less mining investment, lower levels of tax-take from the sector, and an increase in job losses.

"It was increasingly clear that the whole edifice of the mineral resources regulatory regime was primarily there to advance the interests of the 'crony class', and that the amendment bill would dry up low levels of mining investment, earning the government less tax and resulting in further job losses," said Lorimer.

Shabangu had earlier announced proposals for a rescue plan for the gold and platinum sector with the latter potentially benefiting from shared initiatives with Russia, the world's only other major supplier of platinum.

It has been suggested in the past that the two countries could form an 'Opec-type' alliance in which the supply of platinum group metals was controlled and therefore provide price stability.

Lorimer, however, said South African mining was on a downward trajectory. "We have slid another ten places on the Fraser Institute index of attractiveness for mining investment and we are now the sixty-fourth most desirable destination for mining money, two-thirds of the way down the table,” he said.

Commenting on proposed amendments to the Minerals & Petroleum Resources Development Act (MPRDA), Lorimer said they would only work to increase ministerial discretion which had been roundly criticised as a key weakness in the legislation as promulgated in 2004.

“It will dry up our already shrinking pool of mining investment. The government will earn less tax and more people will lose their jobs,” Lorimer said.